Carolina Corporation, an S corporation, has no corporate E&P from its years as a C corporation. At the end of the year, it distributes a small parcel of land to its sole shareholder, Shadiya. The fair market value of the parcel is $75,600, and its tax basis is $44,000. Shadiya's basis in her stock is $16,000. Assume Carolina Corporation reported $0 taxable income before considering the tax consequences of the distribution. (Leave no answer blank. Enter zero if applicable.) Problem 11-72 Part b (Algo) b. How much gain must Shadiya recognize (if any) as a result of the distribution, what is her basis in her Carolina Corporation stock after the distribution, and what is her basis in the land? Answer is complete but not entirely correct. Gain recognized Stock basis Land basis $ $ 5 31,600 X 0 75,600
Carolina Corporation, an S corporation, has no corporate E&P from its years as a C corporation. At the end of the year, it distributes a small parcel of land to its sole shareholder, Shadiya. The fair market value of the parcel is $75,600, and its tax basis is $44,000. Shadiya's basis in her stock is $16,000. Assume Carolina Corporation reported $0 taxable income before considering the tax consequences of the distribution. (Leave no answer blank. Enter zero if applicable.) Problem 11-72 Part b (Algo) b. How much gain must Shadiya recognize (if any) as a result of the distribution, what is her basis in her Carolina Corporation stock after the distribution, and what is her basis in the land? Answer is complete but not entirely correct. Gain recognized Stock basis Land basis $ $ 5 31,600 X 0 75,600
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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d
Transcribed Image Text:Carolina Corporation, an S corporation, has no corporate E&P from its years as a C corporation. At the end of the year, it
distributes a small parcel of land to its sole shareholder, Shadiya. The fair market value of the parcel is $75,600, and its tax
basis is $44,000. Shadiya's basis in her stock is $16,000. Assume Carolina Corporation reported $0 taxable income before
considering the tax consequences of the distribution. (Leave no answer blank. Enter zero if applicable.)
Problem 11-72 Part b (Algo)
b. How much gain must Shadiya recognize (if any) as a result of the distribution, what is her basis in her Carolina Corporation stock
after the distribution, and what is her basis in the land?
Answer is complete but not entirely correct.
Gain
recognized
Stock basis
Land basis
$
$
5
31,600 X
0
75,600
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